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Avoki v. Carolina Telco Federal Credit Union

United States District Court, W.D. North Carolina, Charlotte Division

July 24, 2018



          Graham C. Mullen United States District Judge

         This matter is before the Court upon Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. No. 11). This motion has been fully briefed and is ripe for disposition.


         Plaintiff Francisco Avoki (“Plaintiff”) initiated this action against Carolinas Telco Federal Credit Union (“Defendant” or “Telco”), bringing claims for unfair and deceptive trade practices, breach of contract, breach of the duty of good faith and fair dealing, violation of the Fair Debt Collection Practices Act (“FDCPA”), negligent misrepresentation, violation of the Truth in Lending Act (“TILA”), violation of the Consumer Financial Protection Act (“CFPA”), violation of the Equal Credit Opportunity Act (“ECOA”), and punitive damages.

         Plaintiff was the owner of a Telco account. On November 14, 2012, Plaintiff applied for a share secured loan with Telco for the purpose of purchasing a home. The loan was secured with $35, 000.00 in Plaintiff's account. Plaintiff also allegedly had a life insurance policy with Defendant. The loan agreement contained an acceleration clause that brought the entire balance due in the event of a default. It also provided that Defendant has the “right to take possession of the property given as security for the loan, without judicial process if this can be done with no breach of the peace.” Plaintiff missed multiple loan payments due, in part, to a residential fire. On June 17, 2013, Defendant notified Plaintiff that his account was past due and sought payment or arrangements for payment “within the next few days.” (See Doc. No. 11-5). On June 26, 2013, Defendant advised Plaintiff that his “account remains delinquent, and we have notified you several times to make you aware that it is important for you to bring the past due amount up to date.” (See Doc. No. 11-6). The June 26 correspondence further states that “when you signed the loan agreement, you were advised that if you should default on your payments, the entire balance would be due and payable at once.” (See id.). On July 17, 2013, Defendant advised Plaintiff that “by reason of default in the payment of the installments on the share secured note… the credit union has elected to declare the entire indebtedness . . . immediately due and payable.” (See Doc. No. 11-7). Defendant also advised that if payment of the full balance was not received immediately, Defendant would “have no alternative other than to transfer the full balance of your loan from your share account.” (See id.). Having received no response, Defendant exercised its rights under the loan agreement to set off the amounts owed. After Defendant took control of the funds within Plaintiff's account, a delinquency remained for $306.99.

         Plaintiff concedes he failed to make payments on April 14, 2013 and May 14, 2013 and that “Telco withdraw [sic] all $31, 829.31 full balance paid the loan account and report[ed] [a] delinquency of $306.99 to the credit bureau . . . .” (See Doc No. 1, at ¶¶ 5-6). Plaintiff visited a Telco branch on July 25, 2013 in an attempt to make payments, however at this point Defendant allegedly refused to let him pay his debt. On January 16, 2015, Plaintiff sent another letter asking the bank to reopen their account. On June 17, 2015, Plaintiff allegedly attempted to secure a loan for a new car, only to find out that his credit score was affected by a $322.71 obligation to Defendant.


         a. Plaintiff's Surreply

         As a threshold matter, Plaintiff filed a surreply in this matter without requesting leave of the Court. Defendant has moved to strike the surreply (Doc. No. 17). The Court finds that although it did not grant prior leave to Plaintiff to file the surreply, Plaintiff's surreply does address pertinent issues regarding Defendant's statute of limitations arguments, including arguments that were raised in Defendant's reply. Accordingly, the Court will deny Defendant's motion to strike and will consider Plaintiff's surreply in this matter.

         b. Standard of Review

         Turning to Defendant's Motion to Dismiss, the purpose of a motion to dismiss is to test the legal sufficiency of the complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 556). Conclusory allegations or legal conclusions are not entitled to the assumption of truth. Iqbal, 556 U.S. at 681.

         c. Unfair and Deceptive Trade Practices Plaintiff's first claim for relief is an alleged violation of the North Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”).

         Any civil action brought under § 75 must be commenced within four-years of the cause of action. See N.C. Gen. Stat. § 75-16.2. Plaintiff bases his UDTPA claim on Telco's 2013 set-off by transferring funds he pledged in his account to pay the loan. Plaintiff was well aware of and even threatened litigation regarding the set-off in August of 2013. However, Plaintiff did not bring this proceeding until December 28, 2017. Therefore, his UDTPA claim is barred by the four-year statute of limitations.

         Plaintiff's UDTPA claim must be dismissed pursuant to Rule 12(b)(6).

         d. Breach of Contract

         Plaintiff's second claim for relief is based upon an alleged breach of contract.

         Claims based upon a breach of contract are subject to a three-year statute of limitations. See N.C. G.S. § 1-52. In North Carolina, a cause of action for breach of contract accrues, and the statute of limitations period begins to run, when the injury becomes or reasonably should become apparent to the claimant. Lockerman v. S. River Elec. Mbrshp. Corp., 794 S.E.2d 346, 355 ( N.C. Ct. App. 2016) (citing ABL Plumbing & Heating Corp. v. Bladen Cnty. Bd. of Educ., 623 S.E.2d 57, 59 ( N.C. Ct. App. 2005)). Similar to the UTPA cause of action, the basis of Plaintiff's breach of contract claim is Defendant's 2013 set-off by transferring funds he pledged in his account to pay the loan. As already discussed, Plaintiff was aware of and even ...

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